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Nexstar snaps up 3 Citadel TV stations for $88 million

DES MOINES -- Nexstar Broadcasting Group Inc., one of the largest television station owners in the nation, announced Monday that it was buying Citadel Communications' three stations in Iowa, for $88 million.

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Nexstar snaps up 3 Citadel TV stations for $88 million

Lynn Hicks, The Des Moines Register
8:52 p.m. EDT September 16, 2013

The purchase of the Iowa stations comes amid recent consolidation in the TV industry.

Nexstar Broadcasting Group Inc. announced Monday, Sept. 16, 2013, that it was buying Citadel Communications' three television stations in Iowa for $88 million.(Photo: Screen grab from The Des Moines Register video)

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Nexstar chairman says Iowa stations are important for political advertising opportunities

DES MOINES -- Nexstar Broadcasting Group Inc., one of the largest television station owners in the nation, announced Monday that it was buying Citadel Communications' three stations in Iowa, for $88 million. Nexstar took over management of the stations Monday morning.

The deal comes amid an "unprecedented consolidation" in the TV industry, Citadel noted. Big media companies including Sinclair Broadcast Group, Tribune Co. and Gannett Co., which owns The Des Moines Register and USA TODAY, have spent billions to add local stations in the last year. The more stations the companies attract, the more they can collect in advertising revenue and retransmission fees from the cable and satellite companies that carry the stations.

Nexstar is gaining WOI-TV, the ABC affiliate in Des Moines, WHBF-TV, a CBS station in the Quad Cities metropolitan area, and KCAU-TV, an ABC station in Sioux City, Iowa.

Nexstar, which began in 1996, owns or manages 96 channels, mostly mid-market stations in cities such as Green Bay, Wis.; Springfield, Mo.; and Peoria, Ill. The Irving, Texas-based company's stations reach 14.6% of all U.S. television households, Nexstar said.

Viewers and employees can expect added resources under Nexstar, said Ray Cole, the Des Moines-based president and chief operating officer of Citadel. Nexstar has a reputation for locally focused stations, he said.

"They provide station managers with a great deal of autonomy," he said.

The general managers of the Iowa stations are expected to remain. Each has previously worked for Nexstar, Cole said.

In a letter to employees, Citadel CEO Philip Lombardo, 78, said the decision to sell came after his decision to "slow down" after 50 years in the TV business.

In addition, an investor in WOI and WHBF, Lynch Entertainment, led by financial analyst Mario J. Gabelli, was looking to cash out of its investment, the letter said.

Citadel will continue to own stations in Lincoln, Neb., and Providence, R.I., as well as a 24-hour cable news channel in Sarasota, Fla. Cole, who will remain in West Des Moines with Citadel, said the company will look for new opportunities as well.

Citadel was never publicly for sale. The sale was handled quietly and quickly, Cole said. He also said Nexstar Chairman and CEO Perry Sook is a longtime friend.

In a statement, Sook said Iowa is important for its political advertising opportunities, and the Quad Cities station will fit into its Illinois operations, where it owns or operates six stations. Quad Cities is a group of five cities on the boundary of Iowa and Illinois.

Citadel purchased WOI in 1994 from Iowa State University. No other station in central Iowa has had the same current owner for so long.

WOI is the oldest station in central Iowa, going on air in 1950.

Nexstar also announced Monday that it was teaming up with Mission Broadcasting to buy two stations in Binghamton, N.Y., from Stainless Broadcasting L.P. for $15.25 million. Nexstar's stock (NXST), which is traded on Nasdaq, shot up more than $1 when the deal was announced. It closed up a penny, at $35.13.